krugman: Gold-Plated Indifference

President Bushs Saturday radio address was devoted to health care, and officials have put out the word that the subject will be a major theme in tomorrows State of the Union address. Mr. Bushs proposal wont go anywhere. But its still worth looking at his remarks, because of what they say about him and his advisers.

On the radio, Mr. Bush suggested that we should treat health insurance more like home ownership. He went on to say that the current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes. We can reform the tax code, so that it provides a similar incentive for you to buy health insurance.

Wow. Those are the words of someone with no sense of what its like to be uninsured.

Going without health insurance isnt like deciding to rent an apartment instead of buying a house. Its a terrifying experience, which most people endure only if they have no alternative. The uninsured dont need an incentive to buy insurance; they need something that makes getting insurance possible.

Most people without health insurance have low incomes, and just cant afford the premiums. And making premiums tax-deductible is almost worthless to workers whose income puts them in a low tax bracket.

Of those uninsured who arent low-income, many cant get coverage because of pre-existing conditions  everything from diabetes to a long-ago case of jock itch. Again, tax deductions wont solve their problem.

The only people the Bush plan might move out of the ranks of the uninsured are the people were least concerned about  affluent, healthy Americans who choose voluntarily not to be insured. At most, the Bush plan might induce some of those people to buy insurance, while in the process  whaddya know  giving many other high-income individuals yet another tax break.

While proposing this high-end tax break, Mr. Bush is also proposing a tax increase  not on the wealthy, but on workers who, he thinks, have too much health insurance. The tax code, he said, unwisely encourages workers to choose overly expensive, gold-plated plans. The result is that insurance premiums rise, and many Americans cannot afford the coverage they need.

Again, wow. No economic analysis Im aware of says that when Peter chooses a good health plan, he raises Pauls premiums. And look at the condescension. Will all those who think they have gold plated health coverage please raise their hands?

According to press reports, the actual plan is to penalize workers with relatively generous insurance coverage. Just to be clear, were not talking about the wealthy; were talking about ordinary workers who have managed to negotiate better-than-average health plans.

Whats driving all this is the theory, popular in conservative circles but utterly at odds with the evidence, that the big problem with U.S. health care is that people have too much insurance  that there would be large cost savings if people were forced to pay more of their medical expenses out of pocket.

The administration also believes, for some reason, that people should be pushed out of employment-based health insurance  admittedly a deeply flawed system  into the individual insurance market, which is a disaster on all fronts. Insurance companies try to avoid selling policies to people who are likely to use them, so a large fraction of premiums in the individual market goes not to paying medical bills but to bureaucracies dedicated to weeding out high risk applicants  and keeping them uninsured.

Im somewhat skeptical about health care plans, like that proposed by Gov. Arnold Schwarzenegger, that propose covering gaps in the health insurance market with a series of patches, such as requiring that insurers offer policies to everyone at the same rate. But at least the authors of these plans are trying to help those most in need, and recognize that the market needs fixing.

Mr. Bush, on the other hand, is still peddling the fantasy that the free market, with a little help from tax cuts, solves all problems.

Whats really striking about Mr. Bushs remarks, however, is the tone. The stuff about providing incentives to buy insurance, the sneering description of good coverage as gold plated, is right-wing think-tank jargon. In the past Mr. Bushs speechwriters might have found less offensive language; now, theyre not even trying to hide his fundamental indifference to the plight of less-fortunate Americans.

But hey, if Bush wants his poll numbers to go even lower, charge on. We all saw how well the issue of privatizing Social Security did for his numbers. With this initiative, he could reach Most Unpopular of All Time in a hurry.

Does he not realize that after Iraq, health care is one of the biggest issues of concern to Americans?

And seriously, is there any time a conservative would think tax cuts AREN'T the solution?

I just read about Bush's "health plan" in yesterday's paper, and my mouth dropped open. It's just so stunningly stupid. Even for Bush.

Raising taxes on mostly middle class people who have "too much" health insurance? That's a non-starter. Excuse me, no...that's a NON-STARTER. I just can't imagine what was going through his head (or his advisors') to think that anyone would go along with that.

And I've got to agree that a little tax break will do nothing to make health insurance more affordable for the poor and uninsured.

This is even more futile than Bush's Social Security "reform" campaign, and will go into the toilet even faster.

I can already see it:

Bush flogs this plan for a year.
Democrats and the public criticize it.
Bush finally says, "Well if you don't like my health plan, show me yours."
Democrats craft a better plan.
Bush vetoes it.

I think we've discussed this before. The thread was about Bush having a go at private, employer-based healthcare.

I stated there that Bush's plan, which helps large industry and small business more than anyone else, is to destroy the current system of employer-based healthcare and replace with individual accounts.

He will attempt to push legislation that provides an easy out for employers to transition their employees off the insurance rolls.

Then, it's every man for himself. Just like with auto insurance, those of us who are deemed high risk – using secret industry algorithms – through no fault of our own will be uninsurable or only insurable via prohibitively expensive premiums.

This is their dream fix for healthcare.

Because to them, the healthcare problem isn't about the looming public humanitarian crisis. To them, it's about freeing private business from the burden of being concerned with our health.

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